The Bureau of Labor Statistics (BLS) this morning released its monthly report on the employment situation for August. The good news is that the employment situation seems to be holding steady. The bad news is that it’s holding steady at very nearly the worst level of the recession reached in October of 2009. There’s not been one iota of improvement, in spite of spending under the economic stimulus plan reaching a crescendo in the 2nd quarter of this year.
Here’s the calculation:
As you can see, the employment level rose for the first time in five months. But so too did the size of the labor force – either a coincidence or a controlled reintroduction of workers that the government has been steadily removing, with the explanation that some people had decided to drop out of the labor force. The net result is that the government’s calculation of unemployment actually ticked back up by a tenth of a percent, while my own calculation, which holds the labor force at a fixed percentage of the population, ticked down by that much. For anyone with an understanding of the concept of “statistical significance,” the real take-away here is that employment conditions aren’t improving one bit. What’s worrisome is that the stimulus spending will soon be winding down.
Here are the graphical presentations of the data presented in the spreadsheet above:
The change in employment reported by the BLS breaks down as follows:
- health care: + 28,000 jobs
- construction: + 19,000 (including 10,000 returning from strike)
- professional & business services (temp help): + 17,000
- mining: + 8,000
- retail: + 2,000
- manufacturing: – 27,000
- government employment: – 121,000 jobs (including 114,000 census workers)
Until now, manufacturing has been one of the bright spots so far this year, but much of the growth in manufacturing employment was in rebuilding depleted inventories, a process that’s basically complete. The drop in manufacturing employment in August isn’t a good sign.
This is a picture of an economy that has stagnated at a low level of economic activity and a high level of unemployment. No surprise, given that the administration has done nothing to address the underlying problem with our economy – the trade deficit – which, if anything, seems to be accelerating.